Title: Cartel Stability and Product Differentiation: How Much Do the Size of the Cartel and the Size of the Industry Matter?
Abstract:This article analyses how the degree of product differentiation, the size of the cartel and the size of the industry affect the stability of a cartel formed by any number of firms in an industry of an...This article analyses how the degree of product differentiation, the size of the cartel and the size of the industry affect the stability of a cartel formed by any number of firms in an industry of any size. The paper considers a supergame-theoretic model to define stability. After a non-loyal member leaves the cartel, two possible reactions by the remaining members of the cartel are assumed. The first one is a trigger strategy where the cartel dissolves after one member has left and the second is one where the cartel keeps acting as a cartel with one member less.Read More
Publication Year: 2000
Publication Date: 2000-01-01
Language: en
Type: article
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Cited By Count: 3
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